Smartphone Analysis: RIM, Samsung, HTC, Motorola, SonyEricsson
11/4/2010 by: Tomi Ahonen
I wrote updates of the Q3 results from Nokia and Apple, now the numbers 1 and 2 of the smartphone bloodbath. The rest of the contenders and pretenders are covered with this quick report.
RESEARCH IN MOTION: Battle Royale with Apple For World's #2
RIM - remember, while RIM lost its 2nd biggest ranking to Apple in this Q3, RIM still grew unit sales of Blackberries in calendar third quarter to 12.4 million [RIM estimates its own 3Q 2010 to be up to 14.8M range, so don't be surprised if a press release shows up claiming RIM outsold Apple in "third quarter 2010", Ed.]. It is expanding the popularity of its phone in the consumer segment driven by the youth, and is making major advances in various markets of the emerging world. In India RIM ranks number 2 - just behind Nokia, on the Latin American continent, RIM is the number 1 smartphone maker with 40% of that market. We also need to bear in mind, that RIM grows unit sales every quarter-on-quarter, while Apple makes huge jump in 3Q of any year but then for the next three quarters, Apple sales are relatively flat. So if the current pattern continues, then RIM will 're-take' its position ahead of Apple iPhones sometime in the Spring of 2011. And then Apple likely would leapfrog RIM again in 3Q with iPhone "5". That may be an interesting 'see-saw' battle of market shares for a couple of years to come.
SAMSUNG SURPRISES THE MARKET
Samsung - wow. I told you the Galaxy was hot, but how hot? Samsung grew unit sales of smartphones by about 250% in just one quarter and are now the fourth largest smartphone maker - overtaking HTC. Most of Samsung's 7.85 million smartphone unit sales were Galaxy smartphones running on Android, which currently sell about 2 million Galaxies per month globally. I just retweeted today news from Japan, that the Galaxy has replaced the iPhone 4 as the most popular phone sold in Japan - and do remember, the Japanese are not very likely to accept a 'South Korean' phone as 'worthy' to use in Japan, yet the Galaxy has done that for Samsung. Meanwhile their Bada based Wave phones sold about 1.5 million units in Q3, getting as I have said, the best new smartphone OS launch, since the iPhone - yes, Bada has a better launch first quarter and a half, than Android even had. So for all those who think Bada is doomed - think again. Samsung is the strongest of the global players to go against Nokia the champ in smartphones.
I am projecting Samsung to pass Apple in 1Q of 2011. And because of Samsung's global footprint and carrier relationships and a vast product portfolio, its one rival who, once it passes Apple, will not need to worry about Apple re-taking it... Samsung is destined to become the second biggest smartphone maker next year, as I have been predicting for a while. It is inevitable, if you understand the mobile phone market, not just obsess about whose phone is the best [obviously the iPhone is the most desirable phone, but while the Ferrari may be the most desirable car, it is not the world's bestselling car.].
HTC GETS JUMPED BY SAMSUNG: SPLIT PERSONALITY IN 2011?
HTC is the fifth biggest smartphone maker and the irony is that they've just had their best quarter ever, and are hot with both Android and new Microsoft Windows Phone 7 based smartphones, yet they were just overtaken by Samsung. Yet, HTC is the little smartphone maker 'that could' like the little train that could from the popular children's story. They keep outperforming the market expectations and doing great things. But they are so small in the big picture of the world - not a Top 10 sized phone maker - so their smartphone performance is going to be a smaller side-note to this industry when the story is written at the end of the decade. But good performance none-the-less.
HELLO MOTO... MOTO WHO?
Motorola? There are some who claim that Motorola's smartphone strategy is 'working' or is somehow saving Motorola. Let's be very clear. In 2006 before the iPhone launched, Motorola was the second biggest mobile phone maker, held 21% of the world market, sold nearly 200 million mobile phones, were profitable, and offered both dumbphones and smartphones. Samsung took a similar situation in 2009, and converted it in one year to a market share of 10% of smartphones while retaining profitability and holding onto its dumbphone market share. How did Moto do? It slashed and burned its dumbphone market share, abandoning most regional markets and now sells less than 3% of all mobile phones. How did that transition to smartphones succeed? They managed to grab - drum roll - 5% of the smartphone market share. That is miserable! That is pathetic. And this they did with massive profits, yes? No, they lost so much money in this time that the company is being split and sold in pieces. For 3Q 2010 they made a miniscule profit. Yes, there is the 'right way' to convert your existing dumbphone user base to smartphones [see Samsung] and the wrong way [see Motorola]. Not an impressive performance. But yes, Motorola who was number 2 in dumbphones is now number 6 in smartphones...
SONYERICSSON: AVAITING BIG PLAYSTATION NEWS
SonyEricsson - the smartphones business is trivial for the former giant dumbphone maker. The big expectation is now the rumored PlayStation Phone, which some Sony executives finally admitted, that there is a PSP phone project in the works, but would not confirm when or what form factor or even whether it would be sold as SonyEricsson or perhaps a Sony product.
Others, not much worth mentioning. There was a rumor that Google might resurrect the Nexus phone range with a Nexus Two but that rumor was squashed by Google. Garmin the GPS guys left the smartphone business, not a big surprise there. The whole Nuvi Phone strategy shifted by offloading the hardware unit to ASUSTeK which took over hardware manufacturing, while Garmin sells the phone as an "attachment" to its conventional GPS line-up.
Symbian and MeeGo - Nokia's Symbian is now shipping its S^3 version which by early reviews seems good enough, but by no means better than the leaders like the iPhone or Android. But Symbian has come a long way and is now a viable touch screen UI. But Symbian received very unwelcome news when the last two global handset brands in its family announced they are quitting Symbian. SonyEricsson and Samsung both reported that they will no longer provide handsets using Symbian. It is not the end of multi-vendor support of Symbian, as it is still used by NTT DoCoMo specified featurephones in Japan, so there are several million Symbian operated phones selling in Japan every quarter, but that is about the extent of Symbian now. Its Nokia and NTT DoCoMo, N & N... Meanwhile MeeGo is slated for first phones to ship in 2011, and it is available to developers on Nokia N900 phone, as you can read in our preview.
So lots of huge news for Android. They are now the second best-selling smartphone OS, and sold 20.9 million smartphones in 3Q 2010. They are rapidly approaching the levels of Symbian and the big fight will be in 2011 when will the Android family grow bigger than Symbian. Three interesting caveats, one, Samsung's Android 'loyalty' is suspect, as it will definitely shift support to its own Bada OS during 2011. Secondly, what of Nokia's shift from Symbian to MeeGo. As premium Nokia phones will feature MeeGo, there will be a gradual shift away from Symbian. And then what of HTC? It built its origins on Windows Mobile. It is now a big Android maker, but is committed to Phone 7. Next year may see HTC shifting some vital support away from Android to Phone 7. It makes the Symbian vs. Android battle royale even the more interesting.
What else? Sharp is to release its 3D phone on the Softbank network in Japan before Christmas. It will be an Android phone. You can expect it to be featured in Sharp's 'return strategy' to return to major markets as a phone maker. Having a glass-less 3D display will give Sharp a lot of visibility early in 2011 when that phone launches in new markets. The displays come from the same company which manufactures displays for the upcoming Nintendo 3DS console, MasterImage3D.
Palm? HP has been very lazy in pushing its owned Palm unit, and this is a market that very bizarrely HP is neglecting. We know of upcoming phones and tablets from HP, but this is a far cry from a 'mobile first' strategy over at HP Palm.
Windows Phone 7? Microsoft's OS is now shipping in the first phones. It is getting good reviews. But the family of brands supporting Phone 7 is far smaller than what once supported Windows Mobile. Microsoft will be struggling to grow to any meaningful market share, even though the new interface might prove to be a winner. The company already posted shortage warnings for some of key markets in Europe, such as Orange in UK, Vodafone in Germany etc.
That's my quick views to the bloodbath. I will keep monitoring the space and reporting on major developments.
RIM, Research In Motion, Apple, AAPL, Blackberry, iPhone, Samsung, Galaxy, HTC, Bada, Bada OS, Wave, Microsoft, Windows Phone 7, Phone 7, Android, Google, GOOG, Motorola, Droid, Droid X, Milestone X, Sony, SonyEricsson, Sony Ericsson, PlayStation, PlayStation Phone, PSP, Garmin, Nuvi, Nuvi Phone, ASUS, ASUSTeK,
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